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The transactions were not disclosed as related-party deals in SPGI's 2008 and 2009 accounts.

Turnock, on the eve of his trial, pleaded guilty in the Auckland High Court to a Financial Reporting Act charge over making false statements.

The father-of-three appeared for sentencing this morning, where Crown lawyer Karen Chang said it was important that a serious sanction was imposed because the regime around preparing statements was largely relied on self-regulation.

It was not possible for the Financial Markets Authority to check all documents signed by company directors and the regulator was largely reliant on the "the integrity and honesty and diligence of the directors to self-police themselves", she said.

Chang said there was a tension between Turnock's expression of remorse and him continuing to point out the errors of the accountant who prepared the statements.

Turnock's admission of the charge followed a similar guilty plea from Robinson, who is serving a jail sentence for an unrelated fraud.

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Defence lawyer Simon Lance said the investigation into SPGI wasn't because of complaints about Turnock but because of Robinson, who was stealing from clients in a ponzi scheme.

Lance said the accountant who prepared the financial statements accepted he had made a mistake.

The bottom line was that if the accountant, who knew there were related-party transactions, had prepared these documents correctly, Turnock would not be in court, Lance said.

Turnock, who had no previous convictions, had accepted he should have been far more diligent but Lance said he was "swamped at the time" because Robinson had run away.

"His partner, supposed to be looking after his clients, was overseas, spending his ill gotten gains or whatever he was doing," Lance said.

Justice Anne Hinton, in sentencing Turnock, said the director was aware of the statements around related-party transactions in the accounts.

While Turnock had emphasised that the investors in SPGI were business people, the judge said some of them were vulnerable.

After giving him a modest discount for his late guilty plea, she sentenced him to four months' home detention and 200 hours' community work.